Core Viewpoint - The company reported steady growth in 1H25, benefiting from the recovery in the truck industry and expansion in downstream applications [2] Financial Performance - In 1H25, revenue increased by 2.4% year-on-year to 1.94 billion yuan, and net profit attributable to shareholders rose by 5.7% to 197 million yuan [1] - In 2Q25, revenue was 949 million yuan, reflecting a quarter-on-quarter change of +0.7% and a year-on-year change of -5.7% [1] - The gross profit margin in 2Q25 was 22.9%, down 2.4 percentage points quarter-on-quarter but up 0.6 percentage points year-on-year [3] Industry Trends - The truck industry saw wholesale sales of heavy and light trucks increase by 6.9% and 6.7% respectively in 1H25, reaching 539,000 and 1,036,000 units [2] - The company’s market share for heavy engine crankshafts and diesel light engine crankshafts reached 60% and 42% respectively, benefiting from a mild recovery in the truck industry [2] - The company anticipates a 10% year-on-year increase in heavy truck sales in 2025, supported by vehicle replacement policies [2] Cost Control and Shareholder Returns - The company effectively controlled costs, with selling, R&D, management, and financial expense ratios showing improvements [3] - Operating cash flow in 2Q25 increased by 6.7% to 455 million yuan, while capital expenditures decreased by 19.7% to 122 million yuan [3] - The company announced a cash dividend of 0.50 yuan per 10 shares, resulting in a payout ratio of 29.4% [3] Strategic Acquisitions - The company plans to acquire 100% of Shandong Altai Automotive Parts Co., Ltd. for 135 million yuan to enhance its capabilities in aluminum alloy die-casting and lightweight products [4] - The acquisition is expected to strengthen the company’s position in the domestic passenger car market and improve its product and customer synergy [4] Profit Forecast and Valuation - The company maintains its profit forecasts for 2025 and 2026, with current stock prices corresponding to P/E ratios of 17.1 and 15.6 for those years [5] - The target price remains at 8.0 yuan, indicating a potential upside of 17.5% from the current stock price [5]

Group 1 - Tianrun Industrial plans to acquire 100% equity of Shandong Altai for 135 million yuan, utilizing its own funds [1] - Shandong Altai specializes in high-pressure aluminum castings for major automotive manufacturers, possessing a complete production process from smelting to machining [1][2] - The acquisition aims to enhance Tianrun's capabilities in lightweight automotive components, addressing the industry's shift towards lightweight and high-precision parts [2] Group 2 - Shandong Altai reported a revenue of 593 million yuan and a net loss of 10.18 million yuan in 2024, with a negative cash flow in Q1 of this year [1][2] - The net asset valuation of Shandong Altai is assessed at 135 million yuan, with a significant increase of 118 million yuan, reflecting a 693.86% appreciation [2] - Tianrun Industrial's Q1 revenue reached 1 billion yuan, a 4% increase year-on-year, with a net profit of 98.48 million yuan, up 6.4% [3]